What To Do ? Part Four: Is Your Idea Profitable?

There is no ‘easy button’ for starting a business. Face that fact now or be in for a rude awakening. It all requires effort, research, more effort, and some legwork long before the OPEN sign can even be placed on the door (or virtual door). You’ve been through the’decision to do it’ process and you’ve explored your talents. Chances are both of those actions took weeks, months, or years to finally come to a reasonable conclusion.

Now that you are gung-ho about the business idea you have, it doesn’t mean you are ready to quit your day job. You need to go back to the drawing board and determine whether or not your business will be profitable.

How do you make the determination, you ask? While there is no sure-fire calculation or formula in most businesses to predict how successful you will be, you can guesstimate how well your business can do by using the following tactics:

Check Out the Competition

 

Whether you plan to have a brick and mortar business or operate solely online, you can benefit from looking at the competitors in your proposed niche business. If you plan to establish a business that relies on local customers – let’s say a pizza shop – consider how many other pizza places there are in town. Ask yourself what would set you apart from the others that would bring in steady customers. Find out if other similar places lasted against the competition. Is there really a place for another pizza joint?

Develop Your Business Plan

 

You might downright panic at the thought of having to create a full-length business plan but the reality is in most cases, the process of developing a business plan is essential to really taking a close look at your ideas, goals, intentions, knowledge, and finances for the business venture you wish to undertake.

Some people will argue that a business plan is only necessary when you need loans or investor assistance. While that can be true to some extent, a business plan is still a highly recommended tool to help you see the realities of going into a particular business.

Common-Sense Factor

 

There is an element of common sense that must be involved in pre-planning a new business. If you live in a small town or a rural area, a 5-star hotel might seem a bit ludicrous. Okay- it’s pretty ridiculous! However your small town may benefit from a Bed & Breakfast or a donut shop or a gift company that turns pictures into words. Consider your ideas and how they relate to your specific situation way before giving up your day job, your steady income, and your savings account funds.

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What to Do ? Part Three: Focusing on One Talent

In Part Two of our What to Do series, we talked about exploring your talents being a great place to start when thinking about ideas for a new business. While we covered different aspects of exploring what you can naturally do and how it relates to a niche business idea, you may be the type of person who has too many ideas swirling around to decipher which is the best one for your success. There are some who may be talented at several key things but it is really necessary to narrow down your direction so you can fully concentrate on one idea at a time. (I am guilty of this issue still!)

Look Down the Road

 

Envisioning your future is key to helping you sort out your choices. Take time to daydream – go ahead, I give you permission. Dream about the possibilities of each talent you have. Chances are good you’ll determine which choices have potential for the long-term and which will be better left as a hobby. Pay attention to your own gut reaction when you picture life as a carpenter, writer, jewelry maker or whatever choices you have as a long-term career.

Too Many Cooks Ruin the Soup

 

Just like that old cliché, you can ruin your own chances of success by failing to narrow down your ideas. Trying to do too many things at one time causes you to lose focus and never be able to fully devote your attention on success. It can be really east to get caught up in the excitement of so many possibilities within your reach. But if you are really serious about starting a business, it’s time to get serious about starting a business.

Finding the Niche

Sometimes a talent will enable you to do many related things. Take marketing for example. When you have experience in marketing, it may be more profitable to find a niche you can focus on. Decide if you are interested solely in online marketing or industry-specific marketing. Breaking down the different areas of a talent can help you define where your talents are best served.

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What to Do ? Part Two: Exploring Your Talents

During the last few ‘recession years’ , more people have been finding creative ways to bring in supplemental income from the talents and skills they already possess. There have been many successful and profitable businesses started from on-the-side hobbies. Using your talents to increase your income is not only a great way to make money it can be a very satisfying way to build a new, full-time career.

What’s Your Talent?

 

Perhaps you have always had a knack for being organized and are not afraid of a little hard work. You can easily turn what comes naturally to you into an income-earning business by helping others get organized. You can work as a consultant or earn even more money by also providing the physical labor by cleaning homes, cleaning apartments when tenants vacate, or by cleaning business offices regularly. There are a lot of people who could use a little less clutter in their lives.

You may not always be able to recognize your own talents so don’t hesitate to ask friends or family for their two-cents. Don’t disregard skills you consider inconsequential either. Instead, find creative ways your skills can be of use to others.

You can also check out ideas of how others have capitalized on their skills to make money. Personal stories can be instrument in changing your perspective on the skills and natural talents you have. Seek out others who do what you might want to do and get them to talk to you about what it takes to capitalize on your talents.

 

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What To Do: Part One: Making the Choice

After your decision has been reached about whether or not to become self-employed, it is certainly not a time to relax. Finding the right business idea is just as important as deciding to run your own business.

There are many ideas, business types, and industry niches to choose from. While some people start out with an exact idea of what they want to do, others have no specific agenda except for the push of their entrepreneurial spirit. Still others may start out with specific ideas but gradually move in a completely different direction.

There are generally 3 categories of business-types to consider:

Start-Up From Scratch

 

These businesses require start up from scratch, including finances, business planning, marketing, and operation duties resting on the owner.

Freelancers/Consultants

 

Some professions allow you to work on an as-needed contract basis. Typically, freelancers can work from home with low overhead depending on the nature of the business.

Franchises

 

Franchises come in all different sizes and industries. They usually require an investment of cash (often large amounts) but offer full support, assistance, templates, and marketing resources for the franchise owner.

There are thousands of business ideas already on the market but there is always room for new ideas and business concepts. Exploring these different ideas can be eye-opening and allow you to consider possibilities you hadn’t been aware of before.

The key to success is taking the heaps of information available to you and narrowing down what’s right for you. In part Two of What to Do, we’ll get into more detail about how to find the right self-employment opportunity for you.

 

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Starting Out Decisions: Do I Finally Do It?

Making the decision to start a business all your own can be one of the most freeing moments of your life. It can also be one of the most terrifying. Oftentimes, those with the entrepreneurial spirit will have typically walked to the beat of a different drum for many years of their lives, wondering what it is they want to be ‘when they grow up’. For those who finally come to the conclusion they are ready to take the bull by the horns and start their own business, the Internet is a wonderful place. It can help connect you with like-minded people who see things the way you do. It is also a source of tremendous resources that weren’t always available to entrepreneurs who have gone before you. Everything from business law to tax information to marketing tactics can be found online. On the other side of this coin, all this information can cause a brain meltdown because there is simply too much to sort through during the decision making process.

When I started out, I had wanted to do something for a loooooong time but it all finally came together when my only child was about to start kindergarten and I didn’t want her shuffled from a full day of school to daycare 5 days a week. It was the kick in the pants I needed to just do it.

We’ve made up a list of things to think about when initially thinking about starting to work for yourself. Ultimately, the decision is yours and should not be influenced by anything or anybody. Take a look at some things to consider:

Consider the Meltdown

 

As mentioned, a lot of information is now available to would-be entrepreneurs. If you have begun your quest to learn more about starting a business and the information is too daunting, give that fact some thought. Not everyone is cut out to be an entrepreneur and if the fact-finding missions you must undertake overwhelm you, you may not be ready to step up to the demands of an actual business just yet.

Narrow Your Search

 

Before logging on to the web, sit with an old-fashioned pen and paper and list all of your ideas for a new business – whatever comes to mind about what you envision just jot it down. On a separate sheet of paper, construct a list of pros and cons about what starting a business will mean to you and your family. Be sure to include physical, financial, and emotional pros and cons on your list.

Call A Family Meeting

 

The potentially life-changing decision is not solely yours if you have a spouse and/or children living with you or relying on you financially. Have a sit-down with your family about your self-employment ideas. Be open and not close-minded or defensive about their concerns or questions. You WILL need the support of your family and friends to be successful in business. While you may be the owner of a business, you are not in this alone.

Do the Math

 

Unless you are independently wealthy, you must plan out your financial present and future. Will your new business reduce or eliminate your current income? Do you have available cash to invest in the company and enough to live on for the first 6-12 months? Find out what it takes to start up your business idea then consider if it is something you can comfortably live with. Remember that during the start up phase of most new businesses, you will not turn much of a profit and likely have to put money you do make right back into the business rather than take a paycheck.

Consider the Why’s

 

Owning your own business may seem like a cool idea in theory – but if you are seriously considering the jump, ask yourself why you want to do it and then get ready to answer yourself honestly. Really think about the motives behind your ideas. Some sample questions to pose to yourself include:

  • Are you genuinely prepared to go all the way to achieve your business goals on your own?
  • Are you just sick of going to work?
  • Do you want to pursue your dreams?
  • Do you just want to do what your friends are doing?

Celebrate Whatever Happens

Whether you ultimately decide ‘yes’ or ‘no’, celebrate either decision. If it’s a no-go, at least you worked through the process and made a mature decision. If the answer is ‘yes’ celebrate the milestone in your life and your future – but don’t party too much – you’ve got a business to start.

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